Airbus chosen to build Canada's new search planes, ending 12-year procurement odyssey
16 Airbus C-295 aircraft announced by ministers, head of air force at CFB Trenton
The Liberal government has chosen the Airbus C-295 transport as Canada's next fixed-wing search-and-rescue plane, in a two-step procurement process that will cost taxpayers $4.7 billion over the next two decades.
The selection of European defence giant Airbus ends a 12-year, frustrating odyssey that spans three governments.
Defence Minister Harjit Sajjan, Public Works Minister Judy Foote and the commander of the Royal Canadian Air Force, Lt.-Gen. Michael Hood, announced the deal Thursday at the country's largest military air base, in Trenton, Ont., which is also one of the principal search and rescue stations.
The first phase — at a cost of $2.4 billion — involves the purchase of 16 C-295W aircraft modified for search-and-rescue missions.
A training simulator, to be located in Comox, B.C., and 11 years of in-service support and maintenance will be included. The maintenance will be handled by PAL Aerospace in Newfoundland and Labrador.
An additional in-service support program will have to be negotiated with Airbus, at an estimated cost of $2.3 billion.
Taken together, the combined price tag is considerably more than the $3.8 billion approved by the former Conservative government in 2011, and higher than the original $3.1 billion cost affixed to the plan when Paul Martin's government first announced it in 2004.
"Whether it is in mountainous terrain, in the middle of the Atlantic or over the Arctic, the C-295 is the modern and versatile aircraft we need," Sajjan said Thursday.
The turbo-prop C-295 is in use in 15 countries, mostly for military transport, but also for maritime patrol and anti-submarine warfare.
Elimination of operating base considered
There were three companies in the running: Alenia Aermacchi North America (now rebranded as Leonardo-Finmeccanica), Airbus Defence and Space, and Embraer, a Brazilian aerospace firm.
In a statement, a representative with Leonardo-Finmeccanica would only say that the company has been informed it is not the winner and will take some time to avail itself of a "debrief" from government officials before commenting.
The hybrid procurement was intended to deliver not only aircraft, but recommendations on how many planes are needed and where to station them.
The companies were asked to submit prices and aircraft numbers for a fleet that would operate out of at least four main bases across the country — Greenwood, N.S., Trenton, Winnipeg and Comox, B.C. — and a separate proposal using only three airfields.
But the announcement Thursday looks more like a straightforward procurement.
The high cost — political and financial — of dropping one of the main operating bases was, according to defence sources, a non-starter for a government that is already being knocked around over its handling of the fighter jet replacement.
The air force, which had been accused in the past of favouring the Leonardo-built C-27J, fully got behind the Liberal government's decision on Thursday.
"Thanks to the sensors and systems aboard this new fleet of aircraft, I believe search and rescue is going to become a lot less about search and more about rescue," said Lt.-Gen. Mike Hood. "The C-295 more than meets the requirements of the Royal Canadian Air Force."
Replacing 50-year-old planes
The new planes are meant to replace the air force's nearly 50-year-old CC-115 Buffalos and older model CC-130 Hercules transports currently assigned to search-and-rescue duties.
Foote says the first planes are expected to arrive in 2019 and the final delivery will take place in 2022 — 18 years after they were originally ordered.
Paul Martin's Liberal government started the competition in 2004.
"It boggles the mind," said Alan Williams, who was the head of military procurement when the federal Finance Department approached National Defence, saying it had $1 billion to spend on equipment for the Forces.
Fixed-wing search-and-rescue planes were an obvious choice, he said.
"The minister gets up in the House and basically says, 'We need new airplanes to find people who are lost and save them.' It was a no-brainer from that perspective," said Williams.
Accusations of bid-rigging
But just before the Conservatives were elected in 2006, the program stalled over accusations from defence contractors that the air force had rigged the specifications in favour of the C-27J.
The air force has long denied the allegation, but in 2012 the top brass pitched the former Conservative government on buying surplus U.S. C-27Js.
Williams says there's an important lesson in the long-drawn-out fiasco.
"The military has to know and has to be told" on this project and other that their job is to define requirements for equipment needs and it's the government's job to hold an open, fair tender and pick the winner, he said. "And that's it."
Protecting military from themselves
Commenting on the issue of new fighter planes, he said, "I have no doubt the air force wants the F-35. I can understand that. I have no doubt the air force wanted the C-27J. I can understand that, too.
"But that's why it's incumbent on the assistant deputy minister of materiel, the deputy minister and the minister to safeguard the process and protect the military — actually — from themselves."
Former defence minister Peter MacKay said in December 2008 that the search planes were his top procurement priority, but the effort bogged down and it was eventually referred to the National Research Council for analysis.
The council agreed the military's specifications were far too specific and needed to be broadened in order to ensure competition.